Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

March 11, 2025
Bad Faith Claim To Proceed; Insureds Have Shown Special Relationship Exists

OKLAHOMA CITY — A breach of contract claim against two insurers cannot stand because the insureds failed to prove that the insurers are parties to the homeowners insurance policy; however, a bad faith claim against the two insurers can proceed because the insureds allege sufficient facts to show that a special relationship exists between the insurers and the insureds, an Oklahoma federal judge said in partially granting the insurers’ motion to dismiss.
March 11, 2025
Trial Court Properly Found Insurer Was Prevailing Party In Water Damage Suit

FRANKFORT, Ky. — A trial court did not err in determining that a homeowners insurer was the prevailing party in a water damage coverage dispute because the insureds agreed to dismiss their breach of contract claim prior to trial and the insureds failed to prove their claims for bad faith and violation of the Kentucky Consumer Protection Act (KCPA), the Kentucky Court of Appeals said.
March 10, 2025
Magistrate Dismisses Bad Faith Suit Over Hurricane Irma Damage After Parties Settle

FORT MYERS, Fla. — A federal magistrate judge in Florida signed an order of dismissal one day after a condominium insured voluntary dismissed with prejudice its bad faith lawsuit seeking coverage for property damage caused by Hurricane Irma.
March 06, 2025
Magistrate Recommends Denying Dismissal Bid In Former Surgeon’s Disability Case

TYLER, Texas — Concluding that several issues raised could not properly be resolved at this stage, a Texas federal magistrate judge recommended denial of a dismissal motion in a suit where a former surgeon seeks long-term disability (LTD) benefits and relief for alleged mishandling of her claim.
March 05, 2025
Judgment Denied To Life Policy Beneficiary Over No Incarceration Disclosure

HOUSTON — A Texas federal judge denied a life insurance policy beneficiary’s motion for summary judgment in her breach of contract suit against an insurer for its failure to pay benefits under the policy, finding that the insurer is entitled to cancel the policy due to the beneficiary’s failure to accurately represent the insured’s criminal history in the policy application.
March 04, 2025
Furniture Delivery Company Asks 9th Circuit To Rehear UCL Coverage Dispute

PASADENA, Calif. — A furniture delivery company insured has asked the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that an insurer has no duty to defend it against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, challenging the appeal court’s affirmation of a lower federal court’s grant of the insurer’s motion for summary judgment in its breach of contract and bad faith lawsuit.
March 04, 2025
6th Circuit Affirms Ruling In Favor Of Dentist’s Professional Liability Insurer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals held that because an appellant did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, the insurer had no contractual duty to the insured and, as a result, the appellant’s bad faith claim fails.
March 04, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 1

By Scott M. Seaman
March 03, 2025
Bad Faith Claim Fails Based On Waiver Of UM/UIM Coverage, Judge Says

LAFAYETTE, La. — A bad faith claim against an employer’s auto insurer cannot proceed because no uninsured motorist (UM) coverage is owed to the employee based on the employer’s waiver of uninsured/underinsured motorist (UM/UIM) coverage, a Louisiana federal judge said in granting the auto insurer’s motion for summary judgment.
March 03, 2025
Choice-Of-Law Ruling Issued In Disability Insurance Suit In Federal Court

NEW HAVEN, Conn. — Granting an insurer’s motion for partial judgment on the pleadings in a suit challenging the discontinuation of long-term disability (LTD) benefits, a Connecticut federal judge ruled that the “tort, equity, and contract claims under the common law are not governed by California law” and that three California and North Carolina statutory claims fail as a matter of law.
March 03, 2025
Bad Faith Claim Cannot Proceed Because Genuine Dispute Exists On Coverage

LAS VEGAS — A bad faith claim alleged against an auto insurer cannot proceed because a genuine dispute exists over whether coverage is afforded for an underinsured motorist (UIM) benefits claim, a Nevada federal judge said in granting the auto insurer’s motion for summary judgment on the claim.
March 03, 2025
Homeowner Amends Complaint Against Insurer In Black Mold Coverage Suit

ABERDEEN, Miss. — Consistent with a Mississippi federal judge’s order, an insured homeowner filed an amended complaint against her homeowners insurer, clarifying the date on which the insured was forced to move out of her home as a result of black mold growth.
February 27, 2025
Breach Of Contract, Bad Faith Claims Proceed In Storm Damage Coverage Suit

LOS ANGELES — Summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims is not warranted in a dispute over coverage for storm damages because the parties have not conducted any discovery, a California federal judge said in denying the insurer’s motion.
February 27, 2025
Fact Issue Precludes Summary Judgment In Disability Claimant’s Favor, Judge Says

PHOENIX — Summary judgment in favor of a disability claimant on a breach of contract claim is not warranted because the claimant killed his own motion with “factual friendly fire” by introducing evidence that questions whether the disability insurer terminated the claimant’s benefits based on the available medical evidence or purposefully withheld evidence to prevent its reviewing physicians from finding that the claimant remained disabled, an Arizona federal judge said.
February 25, 2025
Louisiana High Court Refuses To Review Ruling In Hurricane Ida Coverage Dispute

NEW ORLEANS — The Louisiana Supreme Court on Feb. 25 denied an insured’s application for writ of certiorari seeking review of a First Circuit Louisiana Court of Appeal panel majority’s holding that a lower court properly interpreted the state Legislature's amendment of Louisiana Revised Statutes Section 22:1892(H) by Act 290 to be a procedural change that applied retroactively and, as a result, eliminated any class action for damages, including bad faith penalties, brought against the state’s insurer of last resort.
February 24, 2025
Judge Refuses To Dismiss Construction Company’s Cross-Claims Against CGL Insurer

SACRAMENTO, Calif. — A federal judge in California denied a commercial general liability insurer’s motion to dismiss a construction company insured’s cross-claims for breach of contract, breach of the implied covenant of good faith and fair dealing and equitable contribution as assignee of an excess insurer that funded its $2,250,000 settlement of an underlying construction defects lawsuit.
February 20, 2025
Rhode Island High Court Says Judgment Properly Entered For Homeowners Insurer

PROVIDENCE, R.I. — A lower court properly entered summary judgment in favor of a homeowners insurer because the insureds’ assignee failed to offer sufficient evidence showing that the insurer’s handling of its insureds’ storm damage claim constituted a breach of contract or bad faith, the Rhode Island Supreme Court said in affirming the lower court’s ruling.
February 18, 2025
Federal Judge Dismisses Subcontractor’s Suit Against Insurer After Parties Settle

OAKLAND, Calif. — A federal judge in California dismissed with prejudice a subcontractor insured’s breach of contract and bad faith lawsuit against its commercial liability insurer one day after the parties indicated that they have executed their settlement agreement.
February 18, 2025
Insured Permitted To Amend Complaint In Black Mold Coverage Suit

ABERDEEEN, Miss. — A Mississippi federal judge granted an insured’s motion for leave to file an amended complaint against a homeowners insurer to clarify the date on which the insured was forced to move out of her home as a result of black mold growth because the date is necessary to clarify before a decision can be made as to whether the insured’s claims against the insurer are barred by the applicable statute of limitations.
February 18, 2025
Oral Arguments Set In Dispute Over Applicability Of Radioactive Materials Exclusion

CHICAGO — The Seventh Circuit U.S. Court of Appeals will hear oral arguments on April 10 in an insured’s appeal of a district court’s ruling that no coverage is owed by insurers pursuant to the policies’ radioactive materials exclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers.
February 18, 2025
10th Circuit Rejects Condo Developer’s Petion For Panel Rehearing

DENVER — The 10th Circuit U.S. Court of Appeals denied a condominium developer’s petition seeking a panel rehearing of the court’s grant of a new trial following its reversal of a $2.54 million jury award in favor of the developer after finding that the developer cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay.
February 13, 2025
COMMENTARY: The Top Twelve Insurance Coverage Decisions Of 2024

By Robert D. Chesler, Seán McCabe, Madilynne Lee and James A. Goodridge
February 14, 2025
Insurer’s Dismissal Motion Partially Denied In Suit Alleging It Illegally Employs AI

MINNEAPOLIS — A federal magistrate judge in Minnesota on Feb. 13 granted in part and denied in part an insurer’s motion to dismiss a class complaint alleging it illegally uses artificial intelligence (AI) to deny elderly insureds medically necessary care based on a model that the insurer knows “has a 90% error rate,” allowing breach of contract and breach of implied covenant of good faith and fair dealing claims to proceed.
February 14, 2025
Panel: No Coverage For Unfair Competition Suit Against Furniture Delivery Company

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals determined that an insurer has no duty to defend its furniture delivery company insured against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, affirming a lower federal court’s grant of the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
February 14, 2025
Reconsideration Of Order On Extracontractual Claims Is Warranted, Insurer Says

SEATTLE — A Washington federal judge should reconsider a decision that found that the insureds’ extracontractual claims are timely because the extracontractual claims are moot based on the insurer’s payment of an appraisal award, a homeowners insurer maintains in a motion for reconsideration.